Orders are a major concern for the Richmond Fed's manufacturing sample, underscoring what is deepening contraction among the bulk of US business surveys. New orders are unchanged this month at a deeply negative minus 24 for a second month in a row. Backlog orders are at minus 29 following minus 31 and minus 23 in the two prior reports. Employment has understandably turned negative, at minus 7 and minus 3 in February and January to mirror declines underway in shipments, at minus 15 and minus 3. Inflation readings are mixed to favorable; steady for input costs, declining for selling prices and moderating though still severe for wages.

In part due to this report as well as yesterday's weaker-than-expected Dallas Fed manufacturing report, Econoday's Consensus Divergence Index has turned negative, at minus 15 to indicate that the US is now underperforming relative to expectations.

Richmond Fed's manufacturing index, which slipped back into contraction in January at minus 11, is expected to stay in contraction in February at a consensus minus 5.

This survey tracks business conditions in the Richmond Fed's manufacturing sector. The headline index is a composite of the new orders, shipments, and employment indexes.

Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. By tracking economic data such as the regional Fed surveys, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth so that it won't lead to inflation. These surveys give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since manufacturing is a major sector of the economy, this report has a big influence on market behavior.